|Expiring tax breaks and new capital gains rules mean that 2011 tax filings won't look like 2010's.|
This article is part of our 2012 Tax Tips series. Robert Flach is an expert with almost 40 years as a tax professional and also blogs as The Wandering Tax Pro. NEW YORK ( MainStreet) -- OK, you can stop holding your breath. There is not much new for the 2011 federal income tax return other than the annual indexing for inflation. The personal exemption for 2011 is $3,700, and the standard deductions are $5,800 for single filers (and married filing separate), $11,600 for married couples filing joint and $8,500 for head-of-household filers. The standard deduction for dependents is the greater of earned income plus $300 or $950, not to exceed $5,800.
The additional standard deduction amounts for taxpayers who are 65 and older or blind are $1,450 for single or head of household filers and $1,150 for married filers (whether joint or separate). The only major change to the Form 1040 (and 1040A) is the addition of a line in the name and address section for "foreign country name," "foreign province/country" and "foreign postal code" for taxpayers living abroad. There is no more Schedule L (previously used to calculate the standard deduction for certain cases) or Schedule M (to claim the defunct "Making Work Pay" credit). The Schedule C (to claim profit or loss from business) and Schedule E (supplemental income form) have a new separate income line for "gross merchant card and third party network receipts," but the IRS has told us we can enter "0" on this line for 2011. The biggest change is to Schedule D (for capital gains and losses), which has been totally restructured. It now reports carry-over totals from the new Form 8949. The individual trades for the year are entered on this form (which also replaces Schedule D-1). The change to Schedule D, and the Form 8949, is a result of new cost basis reporting requirements. Brokers must report on Form 1099-B the date of purchase and cost basis for stocks sold in 2011 that were bought in 2011. >To submit a news tip, email: firstname.lastname@example.org. Follow TheStreet on Twitter and become a fan on Facebook.